Federal judge hears Nashwauk mineral lease arguments

A federal bankruptcy judge heard oral arguments Tuesday on whether Glacier Park Iron Ore Properties had the right to pull its mineral rights at the Mesabi Metallics Nashwauk mine site out of a bankruptcy agreement and sell them to Cleveland-Cliffs.

Attorneys for Mesabi Metallics, Glacier Park and Cleveland-Cliffs argued their case in front of Judge Brendan Shannon in a U.S. Bankruptcy Court in Delaware. Shannon is expected to release an opinion on the leases soon.

The mineral rights in question account for a substantial portion of the iron ore Mesabi Metallics hopes to mine as the company finishes the former Essar Steel Minnesota project. It's part of a complicated "quilt" of ownership at and around the mine site.

While Mesabi Metallics has purchased considerable private holdings at the site from Superior Iron Ore Properties LLC, and still may retake the state of Minnesota mineral holdings at the site, Craig Averch, attorney for Mesabi Metallics, told Shannon that awarding the Glacier Park leases to Cliffs would create "a hole in the quilt (of land) necessary to mine the property, making it very difficult for the debtor to finish the project."

Glacier Park attorneys Tuesday said they had the right to sell the mineral rights to Cliffs after Mesabi Metallics failed to buy the lease by an Oct. 31 deadline. But Averch argued that the Oct. 31 deadline was superseded by the larger bankruptcy agreement which wasn't settled until late December.

Mesabi Metallics owner Tom Clarke has said he can finish the project even without the Glacier Park leases because he holds the state permit to mine for the site and because he has access to other ore nearby.

Cleveland-Cliffs says it wants the ore at the site to feed nearby Hibbing Taconite which is forecast to run out of ore in coming years.

Jimmy Lovrien is a reporter for the Duluth News Tribune. He spent the summer of 2015 as an intern for the Duluth News Tribune and was hired full time in October 2017 as a reporter for the Weekly Observer. He also reported for the Lake County News-Chronicle in 2017-18. Lovrien grew up in Alexandria, Minn., but moved to Duluth in 2013 to attend The College of St. Scholastica. Lovrien graduated from St. Scholastica in 2017 with a bachelor's degree in English and history. He also spent a summer studying journalism at the University of California, Berkeley.